1. Shifting the Paradigm: A Case Study in Transforming Internal Audit
Atlanta IIA Chapter Meeting
April 2013

2. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Presenters’ Overview
Randy Earley – VP of Audit Services
1.5 years at Cox Enterprises
28+ years in Audit
Industries: Retail; Financial Services; Telecom; Manufacturing; Media; Automotive
Previous Employers: JCPenney; Citigroup; Nortel Networks; Flowserve; SuperMedia
Certifications: CIA; CISA; CRMA; CRISC
Elton O’Neal – Advisory & Assurance Director
5.5 years at Cox Enterprises
11+ years in Audit and IT
Industries: Telecom; Media; Automotive; Manufacturing
Previous Employers: Deloitte; International Paper
Certification: CISA
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3. Cox Enterprises Overview
Cox Enterprises is the nation’s largest, privately-held media and broadband communications company. Headquartered in Atlanta, Cox Enterprises' 2012 revenues are more than $15 billion, and the company has more than 50,000 employees nationwide.
Cable Television
Telephone
Internet Access
Telecommunications
Advertising Solutions
$9.6B
2012 Revenues
Vehicle Auctions
Repair Services
Certification Services
Web Tech Products
Financing Products
$2.7B
2012 Revenues
TV/Radio Stations
Newspapers
Ad Sales Rep Firms
Valpak
Cox Digital Solutions
$1.9B
2012 Revenues
Online Auto Ads
Kelley Blue Book
vAuto
HomeNet Automotive
VinSolutions
$1.2B
2012 Revenues
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4. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Cox U.S. Market Reach
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5. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Today’s Discussion
The Impetus for Change
Our Plan vs. Execution of Our Plan
Our Most Compelling Strategies
Measuring Success
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6. Our Prologue

7. The Domino Effect Questions that could not be answered…
Poor Employee Surveys Results (outlier from the rest of the org)
Changes in Audit Profession
Change in Org Reporting
No Change in Dept Strategy for 15 Years
Questions that could not be answered…
“Are you the right size?”
“Are you spending time in the right places?”
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8. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Where We Were 
PEOPLE: Big 4 external audit alum (mostly SOX experience)
AUDIT PLAN: Cyclical annual plan based on revenue and time
CAREER PATH: Outplacement within Cox to Accounting/Compliance
TECHNOLOGY: Industry tools for audit planning and execution
DEPT VISION/STRATEGY: Aligned with business need    
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9. Strategic Assessment Results
Internal Audit Maturity and Value Continuum
Organization & People
Competency
Financial
Financial & Operational
Financial, Operational
& Strategic
Governance
No Involvement
Limited Involvement
Internal Audit as Advisor/Facilitator
Charter/Role
Financial Controls &
Compliance with Policy
Operational Effectiveness
Business Controls &
Risk Advisor
Processes & Methodologies
Risk Focus
Financial & Compliance
Financial, Compliance & Operational
Enterprise Risks
Methods
SOX controls & Compliance Checklists
Process & Controls
Internal Audit Programs
Risk Intelligence Frameworks
Reports
Financial & Compliance Issues
Process & Operational Improvements
Proactive Risk/Trends
Analysis & Reporting
Stakeholder & Technology
Style
Corporate Police/Reporter
Consultative
Trusted Advisor
Perspective
Historic/Reactive
Current
Proactive/Future
Technology
Basic
Project Management & Administrative Systems
Data Analysis & Continuous Auditing/Monitoring
Perceived Current State
Desired Future State
* Strategic Assessment Review (SAR) completed by Deloitte in December 2010.
Copyright © 2010 Deloitte Development LLC. All rights reserved.
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10. Feedback from Our Customers
“… too much focus on things that don't matter.”
“… majoring in the minors.”
“… need an approach to prioritize [risks].”
“… staff is long on compliance, short on strategy/ops.”
“A paradigm shift is in order….”
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11. The Start of Our Journey: Tweaking Our Compass

12. Deloitte’s Action Plan RoadmapQ4
2010 Deloitte’s Strategic Assessment completed
Jan-Feb Confirm management expectations
Scope Risk Assessment Phase I
Mar-May Conduct a comprehensive risk assessment
Jun Develop an expanded audit risk universe & audit plan
Jul Report out Risk Assessment results
Develop organization and skill set requirements
Jul Rebuild methodologies, processes, and technologies
Aug Enhance reporting and communication practices
Scope Risk Assessment Phase II
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13. Our Immediate Next Steps
Performing benchmarking
Other companies
Online tools/services
Collaborating with a transformation partner
Risk Assessment processes
Talent Management processes
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14. Our Transformed Vision
Portfolio of Services
Audit Services Vision
Org
infrastructure
Strategy and Vision (Upper Management)
Technology & Templates
Methodology & Framework
Performance Metrics
Talent Management
Project Resources (Middle Management & Staff)
Inputs
Assurance
PROTECT
Advisory
ENHANCE
Structured Obligations
Dynamic Ideas from Risk Assessment, Stakeholder Meetings, Industry Practices, and Company Strategies/Goals
VERIFY 
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15. Our Transformation Roadmap
Work Stream
Jan 2011
30 Days
60 Days
90 Days
120 Days
120+ Days
Organization &
People
Competency
Plan
New AS Org Structure
Inventory of Existing Skill Sets
Coordination with CEI HR
New Recruiting Requirements
AS Training Plan
AS Talent Management Plan
Governance
Plan
Business Leader Program
AS Emissary Program
Charter/Role
Plan
Transformation Steering Committee
2011 Budget Update
Mission/Vision Statement
New AS Charter
& Methodologies
Processes
Risk Focus
Plan
Enterprise Risk Assessment
2011 Audit Plan Update
Q2 Project Scheduling & Plans
Methods
Plan
Audit Program Rationalization
Process Analysis Framework
Project Selection & Scoping
Project Staffing Strategy
Reports
Plan
Reporting Methods
Reporting Formats
Reporting Tools
Stakeholder
& Technology
Style
Plan
AS Corporate Rebranding
AS Management Org /Role
Stakeholder Feedback Loop
Perspective
Plan
Audit Transformation Benchmarking
End-to-End Transformation Work Plan
Transformation & Dept Metrics
Technology
Plan
Technology Requirements
Data Requirements
Tech Tools Research
Tech Tools Selection
Technology Implementation Roadmap
Change Management/Project Management
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16. Our Transformation Roadmap
Despite building a comprehensive plan for 2011, our greatest needs and gaps from our stakeholders’ perspectives were focused on two distinct areas.
So, our true transformation was focused on:
& Methodologies
Processes
Risk Focus
Plan
Enterprise Risk Assessment
2011 Audit Plan Update
Q2 Project Scheduling & Plans
Risk Focus
Methods
Plan
Audit Program Rationalization
Process Analysis Framework
Project Selection & Scoping
Project Staffing Strategy
Reports
Plan
Reporting Methods
Reporting Formats
Reporting Tools
Competency
Stakeholder
& Technology
Style
Plan
AS Corporate Rebranding
AS Management Org /Role
Stakeholder Feedback Loop
Perspective
Plan
Audit Transformation Benchmarking
End-to-End Transformation Work Plan
Transformation & Dept Metrics
Technology
Plan
Technology Requirements
Data Requirements
Tech Tools Research
Tech Tools Selection
Technology Implementation Roadmap
Change Management/Project Management
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17. Three Year Vision (circa 2011)
TRANSFORM
2012
BUILD
2013
STABILIZE
Risk Focus
Competency
Everything Else
Internal Improvements
We identified our greatest needs and gaps,
and then addressing them became
the foundation of our transformation.
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18. Exploring New Territory: Our 1st Risk Assessment
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19. Our Risk Assessment Approach
Overall Approach
April 2011
Point-in-Time assessment featuring 60+ stakeholders from CCI, MAN, and CEI
Target audience: VPs and Directors
Risk ranking performed internally by Audit mgmt team and Deloitte Q1
2012
Update of 2011 results featuring stakeholders from all Cox Divisions
Target audience: EVPs and SVPs initially (top-down approach)
Risk ranking vetted through Cox Divisional stakeholders
2012 & Beyond
Ongoing function and responsibility of VP and Director roles
Target audience: EVPs/SVPs quarterly; VPs/Directors monthly
Quarterly validation of risk identification and ranking
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20. IMPACT (Inherent Risk) VULNERABILITY (Residual Risk)
Focused Risk Heat Map 2 1 3 4 6 7 9 8 10 11 12 13 14 16 5 15 17 18
IMPACT (Inherent Risk)
VULNERABILITY (Residual Risk) #
RISK
AUDIT COVERAGE
 IT  1
Current State DR 2
Information Security 3
Future Growth DR  4
Growth Infrastructure 5
IT Investments
STRATEGIC 6
Maturing Market 7
Innovation Incubation 8
Organizational Effectiveness 9
Transformation/Centralization 10
Market Response Time
OPERATIONAL 11
Data Governance 12
Business Intelligence 13
Inventory Planning
FINANCIAL 14
Investment Integration 15
Investment Due Diligence 16
Internal Controls
COMPLIANCE 17
Company Policies 18
E-Rate/Lifeline Compliance
White diamonds indicate areas of current Audit coverage.
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21. Debrief executive stakeholders on risk update
The Iterative Process
Hold risk and relationship management interviews with key stakeholders (SVPs, VPs, and Directors) across business units
Debrief executive stakeholders on risk update
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
Debrief executive stakeholders on risk update
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22. Going Off-Road: Talent Assessments

23. Assessing Our Current Staff
Required across the organization in order for leaders and professionals to be successful
Leadership
Competencies
Focused on a specific job role or the application of specific knowledge
Needed for success in a particular job family or position/level
Professional
Competencies
Technical
Competencies
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24. Our New Operating ModelVP
Director
Manager
Data Analyst
Specialist
Project Execution
& Project Delivery
Project Management
& People Development
Vision
& Strategy
Planning
& Operations
Delivery
Relationship Management
& Operationalization
Collaboration – Cash Flow – Customers – Community
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25. Building a Talent Assessment Center
Measure of Candidate Potential
Interviews
Psycho- metrics
Simulations +
Consensus
Final Decision
How?
Develop a highly objective and scalable process
Assess performance against clearly defined competencies
Use realistic, work-based scenarios to predict future potential
Develop standardized scoring and success measures
Critical Success Factors?
Well-defined job descriptions and competencies
Well-defined decision-making methodology
Well-trained and dedicated Assessors
Well-organized logistics (free from distractions)
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26. Our Assessment Process
Types of Assessments
Analytical Fit
Behavioral Fit
Position/level Fit
Cultural Fit
Personnel Requirements
3 – 8 Candidates
6 – 16 Assessors
Timeframe: 5 Weeks
Recruiting/Initiation as Needed
Full Day of Exercises
Same Day Decisions
Candidates
Assessment
Highlight some metrics/results here (e.g., 20% pass rate, going from 29 down to 5 with old staff, etc.)
Workforce Transition
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27. Paving a New Path

28. Department Priorities thru Transformation
Technology Tools
Methodology
Project Data
Change Mgmt
Stakeholder Mgmt
Communication Plan
Recruiting
Staff Training
Co-Sourcing
AutoTrader.com
Cox Media Group
Phase I Follow-Up
Risk Assessment Phase II
Talent Management
Dept
Infrastructure
Brand
Build-Out
Projects
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29. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Where We Are Today 
PEOPLE: Diverse mix of Big 4 alum and mgmt consultants
AUDIT PLAN: Rolling 6-month, risk-based plan
CAREER PATH: Outplacement within Cox to varied career options
TECHNOLOGY: GRC implemented; technology and data roadmap
DEPT VISION/STRATEGY: Strategic business partner    
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30. Three Year Vision (circa 2012)
People – Build competency and proficiency to support a best practice, world class internal audit function and serve as a springboard for Cox leadership
Process – Develop and operationalize internal processes to be as efficient and effective as possible while being aligned with Cox strategies and management’s intentions
Technology – Implement solutions expanding risk coverage and achieving efficiencies that will allow us to focus on value enhancement without compromising the oversight of risks and controls
2012
2013
2014
BUILD
Complete 2012 Audit Plan within the approved budget
Standardize methodologies & implement technology solutions to drive efficiencies
Finalize talent mgmt and recruit to full headcount
Pilot the business leader development program
STABILIZE
Complete 2013 Audit Plan within the approved budget
Rotate projects and resources through each DIV quarterly
Complete one full rotation of the business leader development program
Maintain full headcount
SUSTAIN
Complete 2014 Audit Plan within the approved budget
Graduate 1-2 AS associates to leadership positions within Cox Divisions
Maintain full headcount
Reassess alignment of department services with stakeholder needs
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31. Our Current Org Structure
PwC Staff/Seniors
Director SME
Vice
President
Exec
Assistant
Advisory & Assurance Manager
Advisory & Assurance Specialist/Data Analyst
PwC Subject Matter Resources
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32. Our Value Proposition to Our Staff
Outplacement
Divisional SME
Functional SME
24 – 28 projects
+240 hours IDP training
2 – 4 direct reports (mgmt)
16 career dev sessions
Advisory & Assurance Director
Promotion
Functional SME
18 – 22 projects
+180 hours IDP training
3 – 5 direct reports
12 career dev sessions
Outplacement
Outplacement
Advisory & Assurance Manager
Promotion
Major/Minor
12 – 15 projects
+100 hours core curriculum
+40 hours IDP training
8 career dev sessions
Outplacement
Outplacement
Advisory & Assurance Specialist
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33. Technology-Enabled Methodology
Project Selection
Stakeholder Discussions
Strategy & Objectives
Risk Assessment
Deliverables
Advisory
Compliance
Prioritization
Reporting
By Function
By Division
By Risk
MULTI-LAYER REPORTING CAPABILITY
Audit Committee
Management (John Dyer)
Stakeholders
AUDIENCE
Manage Projects
Assurance
Staffing & Scheduling
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34. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Department Branding
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35. The Moral of Our Story: Lessons Learned

36. The Top 5 Critical Success Factors
Executive Sponsorship
Prioritization & Communication
Talent: Get the right people on the bus!
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37. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Tie your transformation to the things that matter to your organization.
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38. Focus of Cox Employee Survey
Change Management
Communication
Community Outreach
Compensation & Benefits
Customer Focus
Diversity
Ethics
Future/Vision
Growth and Development
Involvement & Belonging
Leadership
Performance Management
Recognition and Rewards
Survey Follow-up
Teamwork
Values
Work-Life Balance
Addressed by Transformation
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39. Communicate early, frequently,
repeatedly, and transparently! Don’t be afraid to share your vision and plans, even if you know they’ll change… and they will change.
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40. The Evolution of Our Vision
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41. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Don’t underestimate the effort and time required for every work stream. Execution will feel more like revolution than evolution.
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42. Talent Assessment Workstream
08/02 & 08/03
A,B,C,D
07/19
Aon HR
Review B
06/29
A,B,C,D
07/18 F
08/05 H
08/12
Legal
Review
A,B,C
07/08 D
07/08
Audit
Team A
06/29
B,C
07/07 D
07/15 G
07/27 F
08/05 H
08/12
Week 0
Week 1
Week 2
Week 3
Week 4
Week 5
Week 6
Jun
July 8
July 15
July 22
July 29
Aug 5
Aug 12
Assessment Center Materials / Activities
A) Competency Framework & Mapping
Develop departmental Competency Framework
Conduct Job Level to Competency Mapping
B) Job Descriptions
Design Job Descriptions
Validate Competency Framework against Job Descriptions
C) Assessment Center Methodology /Exercises
Identify Critical Competencies (for assessment)
Develop AC* Exercises
Develop AC* Methodology (schedule, scoring process, AC*templates)
D) Assessor & Role Player Briefing
Develop Assessor Briefing Deck and materials
Brief Assessors on AC* Methodology and Exercises
Identify and train role players to deliver consistent experience
E) Assessment Center
Conduct AC* per Job Level per day + + + =
&
F) Consensus Meeting
Determine Successful Candidates
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43. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Complex doesn’t mean better. Strive to streamline and simplify your transformation roadmap and solutions. Why?
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44. CONFIDENTIAL & PROPRIETARY to COX ENTERPRISES AUDIT SERVICES
Project delivery is still expected. Exceeding expectations on project delivery will give your transformation tremendous momentum.
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45. How did we measure success?
Candidly positive stakeholder feedback
On both new state and old state
Steady flow in our project pipeline
New types of projects: strategic and operational
Highly engaged Audit staff
Positive 2012 employee survey results
Project staffing shifted from capability to bandwidth
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46. Thank you for your attention! Questions?
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